Confianz

Categoría: News

  • The evolution of the insolvency system in Spain

    In recent years, the insolvency system in Spain has undergone significant changes that seek to adapt. In 2023, 21,298 insolvency proceedings were registered, and this year a significant increase is expected, reaching 33,623 insolvency proceedings, according to data from the General Council of Economists. This increase represents a 25% increase in corporate insolvencies and a 75% increase in individual insolvencies. These figures highlight not only the current economic challenges, but also the urgency of modernising and strengthening the system to ensure a safer and more dynamic environment.

    Bankruptcy proceedings and the situation of micro-enterprises

    In Spain, 81.5% of insolvencies are «insolvencies without mass», i.e. they lack sufficient assets to cover the costs of the process. i.e. they lack sufficient assets to cover the costs of the process. In these cases, the figure of the insolvency administrator is not mandatory, unless it is requested by a creditor, which is rarely the case. This situation raises doubts about the effectiveness of the proceedings in ensuring fairness and legal certainty for all parties involved.

    The electronic procedure for micro-enterprises, an innovation designed to streamline these processes, has had a low take-up. This could be due to technical barriers, lack of knowledge or lack of confidence in its effectiveness. Given that microenterprises represent a fundamental part of the Spanish business fabric, it is crucial to promote and facilitate access to these procedures, ensuring greater equity and efficiency.

    An added challenge is the lack of updating of insolvency administrators’ fees, which have not been adjusted to the CPI for 20 years. This not only discourages new professionals from entering the sector, but has also led to a decrease in the number of active administrators. This aspect is key to the sustainability of the system and deserves priority attention in future reforms.

    Restructuring plans

    Restructuring plans have been one of the great bets of the Consolidated Text of the Insolvency Act. This pre-bankruptcy tool allows companies to renegotiate their debts and avoid insolvency. Although its use is growing, it is still limited, especially among small and medium-sized enterprises (SMEs).

    Restructuring plans not only benefit companies by allowing them to maintain their operational activity, but also have a positive impact on the economy by reducing unemployment rates and maintaining growth assets. However, for this tool to serve its purpose, it is necessary to simplify the associated processes and to increase outreach to companies that could benefit from it.

    The future of the insolvency system in Spain

    The insolvency system must evolve to adapt to the new economic and social challenges. One of the fundamental pillars is the professionalisation of insolvency administrators. Ensuring that these professionals have continuous training in legal, economic and management areas is essential to ensure transparent and efficient processes.

    In addition, the new Insolvency Administration Regulation is expected to introduce significant improvements. This text could address issues such as the updating of fees, the regulation of access to the profession and the more efficient management of resources in insolvency proceedings. The possibility of converting insolvency administration firms into professional partnerships is also being considered, which could improve the quality and efficiency of case management.

    An opportunity to build a stronger system

    The increase in insolvency proceedings is a reflection of the current economic challenges, but it also presents an opportunity to improve the insolvency system in Spain. Tools such as restructuring plans, the digitalisation of processes and the professionalisation of insolvency administrators can make a big difference in the way companies deal with insolvency situations.

    At Confianz, we work to offer customised solutions to help companies overcome these challenges. From advising on restructuring plans to the comprehensive management of bankruptcy proceedings, we are committed to protecting our clients’ assets and ensuring their business continuity.

  • The Supreme Court equates dation in payment in insolvency proceedings with forced alienation

    A Supreme Court ruling handed down on 21 October 2024 has put an end to the numerous contradictory jurisprudence that existed until now between the different Spanish provincial courts on the effects on lease contracts when there is a dation in payment in the context of bankruptcy proceedings.

    The Supreme Court has decided that the dation in payment, in the context of an insolvency proceeding, can be equated to a forced disposal. Always bearing in mind that it is a transfer subject to supervision and authorisation by the insolvency judge following approval of a liquidation plan.

    The interpretation of the Law on Urban Leases is extended

    In this case a number of properties had been awarded by way of dation in payment in the bankruptcy proceedings of the landlady. The Supreme Court has confirmed that there are two cases in which the existing lease contract with the previous owner (subsequently bankrupt) must be extinguished:

    1. When these contracts are not registered in the corresponding land register.
    2. When, in addition, the new owner after the dation in payment of these properties is unaware of the pre-existence of tenants. He therefore becomes a bona fide third party.

    Legal certainty is therefore guaranteed in these cases.

    The Supreme Court indicates that article 13.1 of Law 29/1994, of 24 November, on Urban Leases is applicable in this type of case. Even though dation in lieu of payment is not included in the list of this regulation. And it does so because, although this is not one of the cases contemplated in the Law, it can be assimilated to a forced disposal derived from a mortgage foreclosure or a court ruling.

    The judgement makes it clear that, in a dation in payment in the context of insolvency proceedings, the debtor’s voluntariness does not play any part whatsoever. We are therefore dealing with a compulsory alienation. This ruling guarantees legal stability in these cases, where until now, clients were forced to recognise leases that were not registered in the Land Registry. All for the simple fact of having acquired the property in an insolvency proceeding and not in a judicial auction.

    Conclusion on dation in lieu of payment in bankruptcy proceedings 

    In its decision, the Supreme Court starts from the interpretations of the precept already made in previous case law. Such as STS 577/2020 of 4 November, 109/2021 of 1 March and 379/2021 of 1 June. In them, it has already declared that, when there is a forced alienation of a property whose lease is not registered, the loss is produced by extinction of the title that legitimised the possession of the occupants. Therefore, the lessor’s right is terminated whenever there is a loss of the right over the property that allowed the owner to lease it.

    The Supreme Court therefore concludes that the dation in payment can be equated to the forced disposal derived from a foreclosure. Especially because it takes place within the framework of a universal process in which an alienation of assets is carried out. The same requirements implicit in the aforementioned article 13.1 of the Urban Leasing Act are therefore met. This is because a transfer of the right to the property that allowed the owner to lease it is assumed by means of the corresponding judicial authorisation. Thus, leases that have not been entered into the Land Registry beforehand will be automatically extinguished.

  • Family businesses optimistic but concerned about regulatory changes

    Family businesses are optimistic about Spain’s economic future, but at the same time they are concerned about regulatory changes and advocate greater legal certainty. These are the main conclusions drawn from the survey conducted among five hundred entrepreneurs of family companies within the framework of the XXVII Family Business Congress held in Santander on 21 and 22 October 2024.

    The event, organised by the Instituto de la Empresa Familiar, was attended by 100 of the largest family businesses in Spain (Santander, Acciona, Puig, Mercadona, Iberostar, Barceló, Gestamp…) and also by some of the 1,800 SMEs that form part of the Institute.

    The meeting brought together more than 650 attendees, reaffirming its position as the most important business forum in the country. It should be borne in mind that the specific weight of the sector is key to the Spanish economy: together, family businesses account for an aggregate turnover equivalent to 30% of GDP.

    Optimism for the near future

    If we analyse in detail the result of the aforementioned survey, we see how the five hundred family entrepreneurs who participated in it score the current economic situation in Spain with a 5.5 (on a scale of between 0 and 9 points). This is the highest rating expressed by the sector since 2018.

    Optimism is maintained in the forecasts for 2025. Fifty-nine percent predicted that the Spanish economy will continue on the path of growth, as it will register a moderate increase in activity with limited net job creation. This is 16% more than at the 2023 congress and the highest percentage since 2017, when growth forecasts reached 82% of the family business representatives consulted.

    Family businesses plan to grow sales and generate more employment

    Forecasts are even better when it comes to assessing how sales and employment will behave over the coming year in their companies. Sixty percent predicted an increase in turnover (10% more than in 2023), 31% thought it would remain unchanged and only 9% expected a decrease (5% less than last year). This growing optimism is a voting pattern that has been repeated at the last four congresses since the end of the pandemic.

    In terms of job creation, 42% of family businesses expect to increase their workforce (5% more than in 2023), another 48% expect to maintain it and only 10% foresee a reduction. Despite this optimism, the sector warns of the difficulty in finding staff as one of the obstacles it usually encounters.

    The threat of an ever-changing legal framework

    For Spanish family-owned companies, the main threats to their growth are regulatory changes. In this sector, it is considered a priority to guarantee legal certainty that does not jeopardise the positive economic and employment cycle that the Spanish economy has experienced since the end of the COVID-19 crisis.

    Enrico Letta expressed himself along the same lines, but more oriented towards the lack of common rules of the game for all. In his speech, the former Italian prime minister pointed the finger at the «great obstacle to EU integration posed by the fragmentation of the regulatory system and the lack of simplification implied by having 27 legal systems applicable to companies».

    In this diverse and changing regulatory framework, family businesses need specialised legal advice such as that provided by Confianz.

  • Labour auditing in M&A: the forgotten part of due diligence

    Big or small, no M&A transaction is without risk. And the surest way to minimise them is to carry out thorough due diligence. In this respect, no company involved in a merger or acquisition would skip the step of a tax and accounting audit carried out by external consultants or lawyers. And yet, some are still not fully aware of the importance of also including an in-depth labour due diligence in the investigation. This is despite the fact that failure to do so can have dangerous consequences for the success of the operation.

    Objective: to identify risks in order to negotiate a fair price

    The aim of the labour audit has to be to detect the points of risk that may exist among the labour aspects of the target company, even if they are hidden from the naked eye. Only with this comprehensive information is it possible to negotiate an appropriate purchase price (usually downwards), determine the return on investment, assess the possible requirement for collateral and even take the decision to abort the transaction due to the excessive risk involved.

    A wide range of aspects to be assessed

    The labour audit has to review thoroughly and in depth the formal obligations of the entity and its employees. This covers a very wide range of items: the staff and its organisation chart; the possible oversizing of the staff; absenteeism levels; overtime and attendance control; the legal relationship of partners, administrators and managers with the entity; the corporate culture; the internal work regulations; contracts and subcontracts; professional classification; salaries and remuneration and their monthly and annual economic cost; the salary scale by categories; compliance with social security obligations; inspection reports; administrative and judicial proceedings in progress; potential claims; geographical mobility; substantial modifications of working conditions; suspensions and terminations; health and safety at work; legal representation of workers and pending litigation.

    Depending on the risks identified in the labour due diligence, the terms of the negotiation and the price of the transaction are likely to be affected in one way or another.

    Consequences of a bad labour audit

    The often underestimated area of employment of the target company can lead to numerous problems for the acquiring party. This is because the company’s obligations towards the workforce are directly inherited by the new owner. For example, the target company may have open legal proceedings for unfair or null and void dismissals, accidents at work, infringement of the Employment Safeguard Clause due to exemptions from social security contributions by ERTEs in the COVID period, etc. The casuistry is infinite, and it is not unusual for the sum of several of these cases to end up adding up to tens of thousands of euros to be paid by the buyer.

    Specialist advice is essential

    Due to the complexity of the labour aspects of any company, it is vital to have a team of qualified and experienced professionals to carry out an in-depth labour audit, analysing the risks in order to provide a realistic picture of the target company’s situation in this area.

    At Confianz we can accompany you in all phases of the process: from data collection and analysis to the labour integration process once the operation has been completed, including price negotiation, decision making and contract formalisation. Tell us about your case.

  • This is how the new Organic Law on equal representation will affect boards of directors

    The new Organic Law 2/2024 of 1 August on equal representation and balanced presence of women and men requires public and private companies to ensure a minimum representation of 40% of the under-represented sex on governing bodies.

    The aim of this regulation is to promote gender equality, social justice and business competitiveness. To this end, it aims to achieve material gender equality in the governing bodies of companies.

    This new Organic Law transposes Directive (EU) 2022/2381 of the European Parliament and of the Council of 23 November 2022 on a better gender balance among directors of listed companies. And we must be vigilant because it amends, among others, the Capital Companies Act and the Securities Markets and Investment Services Act.

    Which companies have to comply with the Organic Law on Joint Representation

    The new rules will be mandatory for:

    • All listed companies
    • Public interest entities that meet the following conditions:

    a) More than 250 employees;

    b) Annual net turnover of more than EUR 50 million or total assets of more than EUR 43 million.

    Mandatory requirements 

    Organic Law 2/2024, of 1 August, imposes a series of requirements on the companies concerned. Some of the most relevant are:

    • Gender quota on boards of directors. The sex less represented on these governing bodies must account for at least 40% of the total. However, the law stipulates that this rule does not have to be applied, although it does have to be justified, when the percentage of women exceeds 60%. Another exception is for public interest companies that are directly or indirectly controlled by a family. In these cases, executive and proprietary directors could be excluded from the calculations, at the company’s discretion.
    • Mandatory annual reporting. Every year, companies must report on gender representation on their boards of directors, and on the measures taken to achieve this goal. Both the annual sustainability report and the company’s website must include information on required gender balance measures and possible sanctions.
    • Sanctions. The Organic Law foresees sanctions for companies that do not comply with the objectives.
    • Incentives: Companies that meet the objectives of the standard will benefit from incentives that could translate into competitive advantages.

    Deadlines for implementation

    The regulation establishes different deadlines for compliance with these quotas, depending on the profile of the obliged company.

    • Listed companies:
      • The 35 companies with the largest market capitalisation have until 30 June 2026 to reach 40% equal representation on their boards.
      • All other listed companies will have a deadline of 30 June 2027.
    • Public interest entities:
      • They shall have reached 33% of the majority of the workforce by 30 June 2026.
      • They have until 30 June 2029 to achieve a 40 per cent representation.

    Conclusion

    Facing this new law of equal representation and balanced presence of women and men will be a challenge for many companies. At Confianz we know this and we are prepared to help them meet all the requirements so that they not only guarantee compliance with current regulations but also increase the diversity and competitiveness of the company.

  • Litigation insurance in M&E transactions

    In recent years, a very sophisticated product has burst onto the Spanish M&A market: Litigation Risk Insurance (LRI). More and more companies involved in mergers and acquisitions are taking out this type of insurance to cover the costs associated with litigation that may arise from the transaction.

    Types of M&A insurance

    In M&A transactions, insurance is increasingly used as a tool to protect the parties involved in the transaction against the risks associated with the transaction. By taking out specialised M&A insurance, it is possible to transfer some of the risks arising from the transaction to an insurer.

    Until recently, insurance was reserved for large M&A transactions, but in recent times it has become popular even for transactions with a value of less than EUR 50 million.

    These are the types of insurance we most commonly recommend in the M&A transactions we advise at Confianz:

    • Representations and warranties insurance: This is the most common and is usually used to cover costs and damages resulting from the possibility that one party is untruthful or inaccurate in the representations and warranties it makes to the other party.
    • Litigation risk insurance: Covers the costs associated with litigation that may arise from the transaction. This is the type of insurance that we will discuss in depth in this article.
    • Environmental contingency insurance: Covers costs arising from environmental risks that may materialise in the transaction, such as soil or water contamination.
    • Fraud and embezzlement insurance: Covers the risks of fraud or embezzlement by the management or employees of the acquired company.

    Types of M&A litigation insurance

    There are three types of litigation risk insurance:

    • Adverse Judgment Insurance. In exchange for a premium, it guarantees that, if there is a conviction, the insurance pays out. In this way, the provision can be removed from the balance sheet.
    • After The Event Insurance or Costs Compensation Insurance. It may even cover the costs of the lawyer.
    • Judgment Preservation Insurance, Judgment Preservation Insurance or Contingency Insurance. When a judgement has already been passed, if this judgement is overturned in the second instance or by the Supreme Court, the insurance pays 80-90% of the amount of the sentence. A typical example would be a provincial court sentence that condemns a party to pay 10 million euros. With a Judgment Preservation Insurance policy the plaintiff can insure a large part of that 10 million euros. In other words, if the Supreme Court overturns the judgement and annuls the judgment, the insurance would pay, for example, 8 or 9 million euros to the plaintiff. If the Supreme Court judgement reduces the sentence to 5 million, the plaintiff would receive 5 million from the opposing party and 3 or 4 million from the insurer. However, this insurance does not cover the possible insolvency of the debtor.

    Conclusion

    Litigation insurance premiums often have a very high cost that is usually not affordable. It is also important to bear in mind that the insurance will not cover all risks, and there may be exclusions and limitations in the policy. Highly complex clauses need to be negotiated. For these reasons, it is advisable to seek advice from M&A lawyers.

  • By 2026 companies will have to communicate salary levels to all employees

    It has been more than a year since the European Parliament’s Directive 2023/970 known as the EU Pay Transparency Act was passed, which aims to reinforce the principle of equal pay for women and men, eliminate the gender gap and ensure that companies offer equal pay for equal work or work of equal value. The time is therefore approaching for companies to implement this regulation. From 7 June 2026, it will be mandatory to provide prior salary information in job advertisements and to communicate salaries and explain the criteria used to determine salary levels. In addition, companies will have to take action when they detect a significant pay gap.

    New rules for recruitment processes

    In selection processes:

    • Employers may not ask applicants about their current or previous salaries.
    • Candidates will have the right to know the starting salary or pay band for the position for which they are applying before the interview. It will no longer be sufficient to refer to the relevant collective agreement.

    Transparency in salary levels and remuneration criteria

    Companies are obliged to make available to their staff the criteria used to determine the remuneration of each employee, as well as the salary levels and pay progression.

    In addition, each worker may request his or her individual pay level and average pay levels, which the company shall provide broken down by sex for categories of workers performing the same work or work of equal value.

    Additional obligations for companies with more than 100 employees

    Companies with a workforce of more than 100 employees must, after consultation with employee representation, communicate to the competent authority specific information on their pay gap. The periodicity of this obligation varies according to the size of the workforce. Companies with between 100 and 249 employees must do so every 3 years. Companies with more than 250 employees must update the information on an annual basis.

    Companies with a 5% wage gap will have to take action

    The EU’s ultimate goal is to fix the pay gap at a maximum of 5%, while the current European average is 13%. For this reason, the regulation goes further than just requiring transparency in wage information to impose corrective measures. Companies with a pay gap of 5% or more will have to carry out a pay assessment together with workers’ representatives with the aim of closing this unjustified gap. They will have a maximum period of six months to do so.

    Workers who suffer pay discrimination on grounds of gender may receive compensation. The Directive also provides for penalties for companies where there is pay discrimination. Depending on the seriousness of the offence, fines range from €626 to €225,018.

    Conclusion

    The implementation of the Pay Transparency Act represents an important legal change for companies. Until now, the burden of proof has been on the employee to prove that he or she is suffering from pay discrimination. From next year onwards, however, it will be the employer’s obligation to prove that he or she has not violated EU rules on equal pay and pay transparency.

    This Directive, still pending transposition into Spanish law, entails significant risks for companies, such as a general increase in salaries or less room for wage negotiation. Confianz’s team of labour law advisors can help you comply with the new regulations while minimising the negative consequences.

  • Accounting and registration obligations for corporate tax purposes

    Taxation and accounting must always go hand in hand in companies. Because if the accounting data contains inaccuracies, the tax returns will contain errors. And at this point, the dreaded tax inspection can come into play.

    Another example of the importance of accounting is Article 11.3 of the Corporate Income Tax Act, which states that for an expense to be deductible it must be recorded in the profit and loss account or in a reserve account.

    What are the accounting and registration obligations of companies

    In order to carry out a good tax management in due time and form, it is essential to have up-to-date accounting records that reflect a true and fair view of the company. For this reason, the Corporate Income Tax Act and the Commercial Code establish a series of accounting and registration obligations for corporate income tax purposes. In other words, a set of rules that companies must comply with in relation to the keeping of their accounts and the documentation that supports them.

    Its objective is twofold. On the one hand, to guarantee the transparency and reliability of the financial information that serves as the basis for companies’ tax assessments. On the other hand, to facilitate control by the tax authorities.

    Accounting obligations

    • Keep orderly and complete accounts. In chronological order, without blank spaces, interpolations or erasures. It must clearly, accurately and concisely reflect all the operations carried out by the company.
    • Compulsory accounting books:
      • Book of inventories and annual accounts. It opens with the detailed opening balance sheet of the company. At least quarterly, the trial balances must be transcribed with the trial balances. Also the annual accounts and the year-end inventory.
      • Day book. This records all transactions relating to the company’s activity. The joint entry of the totals of the operations for periods of up to one quarter is valid, provided that the details appear in other books or concordant registers.

    Annual filing with the Commercial Register

    Article 27 of the Commercial Code stipulates that, at the end of each financial year, companies are obliged to file annual accounts with the Commercial Register.

    These annual accounts comprise the balance sheet, the profit and loss account, the cash flow statement, the statement of changes in equity and the notes to the financial statements. This is the information on the basis of which the corporate tax base is determined.

    Registration obligations

    Article 30 of the Commercial Code states that companies must keep the books, correspondence, accounting documents, invoices, contracts and supporting documents concerning their business for six years from the last entry made in the books. This is in contradiction with the statute of limitations for the administration to determine the tax debt, which is four years.

    It is therefore the case that, although the administration’s right to adjust a tax is time-barred, the company still has to keep the accounting books and other documentation. This is because in the case of the offset or deduction of certain tax credits, the tax authorities have 10 years to check the validity of the offset or deduction.

    Conclusion

    In summary, compliance with accounting and registration obligations for corporate tax purposes is essential for companies, as non-compliance can lead to administrative and even criminal penalties. To avoid these risks, it is advisable to seek professional advice from experts in accounting and taxation.

  • Frequent conflicts in the family business and how to avoid them

    Like any other organisation, family businesses are not exempt from conflict. And since disputes are inevitable, the smart thing to do is to embrace them as an opportunity for change, organisational strengthening and growth.

    4 possible causes of conflict in a family business

    In the family business, emotional and business factors are intertwined. As a result, these are four of the most commonly encountered conflicts.

    1. There is no common goal

    When each member of the entrepreneurial family has his or her own personal goal, it is easy for them to rebel against any decision that does not help them achieve their objective. For this reason, it is essential to define a vision and a business culture agreed with all members of the family so that personal needs take second place.

    2. Lack of a good definition of roles

    In family businesses there is an overlap between two organisms of which the same people form part: the family, which is based on emotional ties; and the company, which is based on hierarchical roles. To avoid conflicts that can easily spill over to the family level, it is essential that there is a clear definition of roles and responsibilities in the company and that appointments based more on family relationships than on professional competence are avoided. The creation of a family protocol is a way to ensure that all family members are aware of the company’s operating rules.

    3. The always complicated succession

    The transition from one generation to the next at the top of the family business is one of the most delicate moments for this type of company. To avoid struggles for control of the company, it is advisable to plan the succession process in advance. However, sometimes this preparation is delayed because the next generations are not interested in taking an active role in the company or because the founder himself does not want to lose his status. Nor should we fail to foresee the possibility of a forced succession due to a sudden and unexpected event, such as the sudden disability or the unforeseen death of the entrepreneur. In these situations, having a roadmap that stipulates the steps to be taken can make the difference between the survival or death of the family business.

    4. Communication problems

    Smooth communication is essential for good understanding and good governance of the company. Family councils should serve as forums for discussion to mediate and resolve disagreements. However, lack of communication between members of the business family is another common source of conflict. Verbal communication is often abused to the detriment of written communication and there are difficulties in maintaining frank and open dialogues. It is advisable to encourage training in effective communication, negotiation and conflict resolution skills to help separate the personal from the professional.

    How to anticipate the emergence of conflict

    If not dealt with in time and in an efficient and orderly manner, conflicts can fester and become chronic, even leading to the end of the family business. But it is even better to prevent their occurrence with the necessary legal instruments.

    Using a consultancy firm specialising in family businesses such as Confianz can be useful for dealing with the process of creating the family protocol, family pacts, succession pacts, etc. Also, in the case of more complex conflicts, to mediate and reach consensus solutions avoiding misunderstandings or even sanctions due to ignorance of legal regulations.

  • M&A forecasts: exit pressure grows

    The first half of the year has not been as good as forecasts expected, but macroeconomic factors augur a recovery of the M&A market by the end of 2024, despite the current uncertainty.

    Exit pressure is growing because the more time passes with a reduced number of M&A deals, the more the need for these deals grows. There is pent-up demand, especially from private equity funds. In addition, companies are turning to deals to accelerate growth and reinvent themselves in a time of change and dynamic environment: artificial intelligence is revolutionising business models across the board. CEOs’ desire to drive growth for their companies in a low-growth economy where organic growth is not easy also creates M&A opportunities.

    Private equity funds have their sales portfolios full

    According to PitchBook data, private equity firms had more than 27,000 portfolio companies worldwide at the beginning of 2024. Many private equity firms are in the process of raising funds and have some urgency to sell.

    Uncertain environment forces continous adaptation

    Today’s macroeconomic, geopolitical and technological factors create a disruptive and complex environment that forces companies to continuously innovate and reinvent themselves. In this situation, M&A is the ideal strategy to acquire new capabilities, talent and technology or to divest non-core assets.

    AI is here and it will change almost everything

    The impact of generative AI is already beginning to be significant in business and society. And in the near future, it will generate huge cost efficiencies, create new sources of revenue, improve the value proposition… Forecasts suggest that this is another factor that will require companies to re-evaluate their business models, their strategies, their markets…

    Organic growth forecast to stagnate

    The macroeconomic environment makes it increasingly difficult for companies to grow organically. Many will have to resort to M&A to achieve inorganic revenue growth.

    M&A forecasts: sectors that will be most active in the market 

    • The move towards electromobility will generate M&A deals between automotive manufacturers and the technology sector or the mining of materials essential for battery production.
    • Some of the pharmaceutical industry‘s most important patents will expire in the coming years. Companies in the sector will use M&A to acquire biotech companies.
    • Energy companies in renewables and also in fossil fuel production, seeking to gain efficiency gains through size and access to new oil and gas reserves.
    • Again, the technology sector will see major deals between companies in AI, cybersecurity, cloud storage…

    Conclusion

    None of the macroeconomic factors mentioned in this article will disappear in the short term. So the big question is not whether M&A will pick up again, the question is when. And we have reason to believe that it will be in the coming months.

    Because at Confianz we are already detecting an upturn in activity among sellers. Many are preparing for sale, developing business plans and conducting sales due diligence. Our forecast is that more quality assets and businesses will come to market in the coming months.